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Mon May 12, 2008

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SEOUL, May 09, 2008 (AsiaPulse via COMTEX) -- A high-ranking official of Fitch Ratings, a global appraiser, forecast Friday that South Korea's economic growth will slow to 4 per cent this year from the previous year's 4.9 per cent amid high crude prices and galloping consumer prices.

At a conference held in Seoul, James McCormack, senior director of the rating agency's sovereign team, also expressed skepticism over the government's objective of attaining growth of 6 per cent for this year, saying that such a target can be attained only in the early stage of economic development.

McCormack forecast that the country will see its inflation jump 3.5 per cent this year, higher than the previous year's 2.5 per cent gain. He cited rising costs to import crude oil and other raw materials as the reason for the higher projection.

The Fitch official added that South Korea's sovereign rating is still solid at "A plus," and said that the country has successfully recovered from the 1997-98 financial crisis that hit many Asian economies.

Fitch has retained its sovereign rating for South Korea, Asia's third-largest economy, at the current level -- its fifth-highest investment grade -- since it upgraded the rating a notch from "A" in October 2005.

Late last month, a delegation led by McCormack visited South Korea in order to assess the country's macroeconomic situation, fiscal stability and the North Korean nuclear problem, according to the Ministry of Strategy and Finance.

(Yonhap)

(C) 2008 Asia Pulse Pte Ltd

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